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A. G. Schneiderman Announces $20 Million In Funding To Help Families In New York State Avoid Foreclosure

59 Housing Counseling Groups And 35 Legal Service Organizations To Be Awarded Funds Under The AG’s Homeownership Protection Program (HOPP)

Schneiderman: Funding Housing Counseling And Legal Services Will Help Families Stay In Their Homes

NEW YORK – Attorney General Eric T. Schneiderman today announced the grantees of the Homeowner Protection Program, his office’s commitment of $60 million over three years to fund housing counseling and legal services for struggling New York homeowners. Today’s announcement covers the first year of program funding at $20 million to aid struggling homeowners across the state who are fighting to avoid foreclosure and remain in their homes. Throughout New York State, 35 legal services organizations and 59 housing counseling agencies will receive over $16.1 million to provide free foreclosure prevention services. An additional $3.9 million has been allocated for training, technical assistance, and other support services to assist homeowners in foreclosure.

“The rise in foreclosures in New York State is troubling, but this isn’t just a matter of numbers: each foreclosure represents a devastating loss for a family and a community. This program puts homeowners first, and these organizations will help get our neighborhoods back on track,” said Attorney General Schneiderman. “Funding housing counseling and legal services is an essential first step to help more families stay in their homes and avoid foreclosure. As we continue to investigate the mortgage crisis that has hurt communities in every corner of this state, we must ensure that homeowners get the expert guidance and legal representation they need to protect their rights before it's too late.”

The funds awarded today are the result of a competitive Request For Applications process and represent a portion of the millions ofdollars that New York received as a result of the National Mortgage Servicing Settlement that was announced in February between the five largest mortgage servicing banks, 49 states, and the federal government over foreclosure abuses.

According to data collected by the New York Federal Reserve, there are more than 140,000 mortgages across the state that are seriously delinquent, defined as in foreclosure or more than 90 days in arrears. Some of the hardest hit communities are on Long Island, in Brooklyn and Queens in New York City, and in the Hudson Valley.

The Homeowner Protection Program funding announced by Attorney General Schneiderman today will benefit homeowners at risk of foreclosure across New York State. Direct service providers will use the announced funds to assist homeowners in navigating the long and often complicated process of applying for loan modifications and seeking other foreclosure prevention alternatives. In recent years almost half of homeowners facing foreclosure have been forced to navigate the process without an attorney and 63 percent of New Yorkers are unrepresented at settlement conferences. Many also lack access to housing counselors.

The combined organizations that will receive funding under the Attorney General’s HOPP Program were notified in writing earlier this week and are expected to sign contracts to provide services in early October to ensure that there are no disruptions in services to homeowners who rely on these professionals as a lifeline during these very difficult negotiations.

A portion of the $20 million is also going to support a partnership between the OAG and two “Anchor Partners,” who will assist with training, technical assistance, and other support systems to ensure the network is providing the highest quality of services to at-risk homeowners. The Center for New York City Neighborhoods will serve as Anchor Partner for groups operating in NYC, and the Empire Justice Center will serve as the Anchor Partner for the rest of the State. Both organizations have a long history of grant management for government programs, as well as direct training, technical assistance, and support to direct service providers in the areas of housing counseling and legal services.

Anne Erickson, President of the Empire Justice Center said, “Attorney General Schneiderman is helping to level the playing field for homeowners who are struggling to stay in their homes. The HOPP initiative comes at crucial time when past resources for Housing Counseling and Legal Services are drying up. Thanks to the Attorney General’s commitment, New Yorkers across the state will continue to have access to high quality advocates, which in turn, will greatly improve their chances at negotiating the preservation of their homes.”

Christie Peale, Executive Director of the Center for New York City Neighborhoods, said, “Attorney General Schneiderman’s commitment to fund legal services and housing counseling for the next three years is a real lifeline for those families struggling to pay their mortgages and our neighborhoods burdened by foreclosures. As one of the Anchor Partners, the Center for New York City Neighborhoods is dedicated to working with the Attorney General’s office to deliver this vital assistance to New Yorkers as quickly as possible.”

Legal services and housing counseling funded through New York’s Foreclosure Prevention Services Program have become an integral part of the foreclosure process in New York State. Funding for the program was set to expire on April 1 of this year, but the Attorney General provided $15 million from the national mortgage settlement to extend it until October 1. Attorney General Schneiderman's Homeowner Protection Program will replace the state’s Foreclosure Prevention Services Program when it expires and ensure that these critical services will continue to be funded for at least three more years.

New York’s comprehensive foreclosure prevention law entitles homeowners to a 90 day pre-foreclosure notice before a lender can begin a foreclosure action. This notice is required to include a list of at least five nonprofit housing counseling agencies that can assist homeowners at risk of foreclosure. These organizations can sometimes help homeowners obtain loan modifications from lenders at foreclosure settlement conferences. Without funding for the Attorney General Schneiderman's Homeowner Protection Program, most of these agencies would lose the resources necessary to fulfill these critical obligations to homeowners.

In addition to penalties for past abuses, New York’s share of the National Mortgage Settlement includes direct relief to victims of wrongful foreclosure conduct and billions of dollars nationwide for loan modifications, including principal reductions for struggling homeowners. The settlement, which imposes strong national standards for mortgage servicing, also fulfilled Attorney General Schneiderman’s demand that he retain the right to bring legal action over misconduct that has not yet been fully investigated.

Today’s announcement is the latest part of Attorney General Schneiderman’s multi-pronged strategy to stem foreclosures, provide relief to struggling homeowners and hold accountable those responsible for the mortgage crisis. Earlier this year, Attorney General Schneiderman introduced the Foreclosure Fraud Prevention Act, which would impose criminal penalties for knowingly filing false documents in a foreclosure proceeding, or overseeing employees who engage in such activity.

In January, A.G. Schneiderman was appointed by President Obama to co-chair the Residential Mortgage-Backed Securities Working Group. This joint investigation brings together the Department of Justice (DOJ), HUD, the Securities and Exchange Commission (SEC), the Consumer Financial Protection Bureau, several state law enforcement officials, and other federal agencies to investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities. It builds upon ongoing state and federal investigations, while also launching new ones.